Critics Had Warned of Plummeting Values Due to Bloomberg Administration Policies

The first auction of New York City yellow cab medallions in five years fetched record prices on Thursday, officials said, providing a counterpoint to critics who warned of plummeting taxi values after the Bloomberg administration made sweeping industry changes.Bidders—restricted to medallions for wheelchair-accessible vehicles—offered as much as $1.26 million for a single placard, which permits the holder to operate one of the city's 13,000 yellow cabs. The medallion auction was the first since 2008, and the initial phase of a planned sale of up to 2,000 medallions over the next several years projected to raise more than $1 billion for the city. The sale was part of a pact among city officials, industry leaders, legislators and Gov. Andrew Cuomo that created a new class of street-hail vehicles to serve areas outside central Manhattan that yellow cabs have historically under-served.Those apple-green "Boro Taxis" are a point of contention between the cab industry and Mayor Michael Bloomberg and his taxi commissioner, David Yassky. Many medallion owners said the glut of new "Boro Taxis" would erode the value of their holdings.After the auction, Mr. Yassky said the market disagreed. "These prices are a strong vote of confidence in the health of the New York City taxi industry and by extension the New York City economy," he said.The Metropolitan Taxicab Board of Trade, a fleet-owners group frequently at odds with Messrs. Yassky and Bloomberg, issued a statement citing "optimism" about the impending end of the Bloomberg administration as the reason for the high prices.Thursday's auction was for "minifleet" medallion pairs that permit owners to outfit two cabs. The city reported a high winning bid of $2.52 million for two placards, and a low winning bid of $2.05 million. Sales haven't yet been closed, but if all of those submitted were accepted, the city would gain just under $230 million, officials said.The auction potentially adds 200 vehicles to the 13,237 yellow cabs that now ply the streets of the city and would nearly double the number of cabs on the street that can accept a wheelchair, from the existing 231.The aggressive bidding at Thursday's auction surprised analysts' expectations in part because wheelchair-accessible medallions—like all 2,000 of those to be sold as part of the current expansion—usually sell at a discount. That is because wheelchair vehicles are generally more expensive to purchase or retrofit and drivers can require extra training in how to use them, observers said."It's stronger than we thought," said Andrew Murstein, president of Medallion FinancialCorp. TAXI +2.45% , a publicly traded firm that owns and finances medallions. "I think we were expecting average prices of about a million and low bids of about $900,000 to win."Mr. Bloomberg cited Medallion's strong stock showing over the past year on Thursday as evidence that his administration has helped the industry."Their stock had gone up 60% in the last year, while the yellow cab industry said it would be devastating to their business," he said. "It's not. It's been great for the yellow cabs, it's been great for the green cabs."Mr. Murstein wasn't ready to give the mayor credit. As the taxi industry hinted in its statement, Mr. Murstein said the prices were possibly lifted by the incoming mayor, Democrat Bill de Blasio, who received financial backing from the taxi industry and has criticized many of Mr. Bloomberg's taxi policies.Mr. Murstein said rising values are also influenced by factors including credit-card use boosting gross revenues for cabbies and fleets, and the use of smartphone apps to connect riders to drivers. Both changes came at the administration's urging.—Mara Gay contributed to this article.